we failed the means test, now what :(

[shorti]

So, my hubby and I were all set to sign our paperwork that our lawyer had prepared to start our bk process. We owe over $70,000 in credit cards and there is no way we can make the minimum payments each month. We are trying to have a child, and this adds to the need to change our financial situation. We were told by our lawyer that we have the following options: file ch 13 (she didn't recommend this for us); have hubby file, then, after we have a child, I can file (as this will put us under the means test-this is what she recommended). The other option I thought of was to keep paying what we can on cards, and wait til we have a child, then file together (as we will then pass the means test- problem with this, we are not pregnant yet).
-The other concern, when we had our first meeting with the lawyer, she told us to stop paying our cards, as it is putting money in a "black hole". We are now getting 20-30 calls a day and havent paid some of them in 2-3 months. We really have no direction, so any ideas would be greatly appreciated!

[DebtEnder]

How much did you miss the means test by. $200 a month? 400? 1000?

If you are in the couple hundred range over you expenses double and triple check your expenditures. Don't go with the IRS limits, unless they are higher then what you actually do. Be %1000 positive on what you spend for food, gas, utilities, education, etc etc etc. If you have been paying via debit/credit card go back and look at ALL your purchases this past year and find out exactly what you spent stuff on. In alot of cases people underestimate their true expenses ( which is horrible in a CH13 as you have little/no wiggle room) and outright forget expenses like maintenance on car/home/health..

[OhioFiler]

Hitching your bk wagon on a pregnancy star isn't the best planning strategy. You just don't know when that will happen.

You need to provide us a better picture of your income and expenses as they appear on your means test and schedules I and J. If the inclusion of one rug rat to the petition solves your filing problem we should be able to help you get this resolved.

Don't worry about the calls. Tell them you intend to file bankruptcy and give them your attorney's name and phone number.

[shorti]

Yes, this is why we are looking for other options . Here is some more info:
Our schedule i is: 4359.76
schedule j is: 3489.00 (this we are able to bump up a bit, our lawyer did not include home maintenance, laundry/dry cleaning, transportation- would this include car maintenance?, recreational stuff)
which leaves $870 as monthly income

Also, our lawyer said that we have to use some "local standards" such as vehicles, housing

The test says we have $556.12 disposable monthly income (this is how much we are over the mean test, monthly). Once again, any ideas? Thanks for the comments so far.

*Edit*
Our annualized current monthly income is 69,866.64
The median family income is 53,011
This is why we need a 3rd person in our family, it would bump the median up to 69,000.
Let me know if you need any additional info

[backtoschool]

Have you listed as expenses:

Health insurance
Life insurance
Home insurance
car insurance
gas for car
oil changes and maintenance for car
food
phone
cell phone
cable
electricity/heat
dry cleaning
laundry
haircuts
personal grooming products
household cleaning products
dental checkups
doctor's visits
clothing purchases
educational expenses
any dues or subscriptions you need for work


My guess is that you missed something in that list, or underestimated your actual expenses on something on that list.

[DebtEnder]

Are the local standards higher or lower then your actual expenses for house/home and car?

If the local standard is 900 but you pay 1100 and have done so for awhile then unless you have a real pita for a TT then that is your real expense. More solidly proven then alot of other expenses tbh.

[Amy26]

Also, have you shopped around a few attorneys? It is generally best to get a nice array of lawyers and opinions before settling on one. A lot of people on the forums have had one attorney say NO YOU CANNOT FILE A 7 and then another say sure you can!

[liz417]

I would continue to shop around for another attorney. I am over the median by $21k and was able to exceed the local standards on some of the expenses (be prepared to show receipts). Do you owe a home? I interviewed 6 attorneys and most of them took one look at my income (without running the means test first) and told me ch 13 only!

Good Luck!

P.S. As soon as you retain your attorney, you should be able to send all your collection calls to his/her office. I retained my attorney a YEAR before I filed (as he advised me to stop paying my creditors too) and sent all calls his way!

[cleanslate01]

I would also recommend finding another attorney. We were over the median too and our attorney got us into a chapter 7. Also, do you have any control over the income number? We reduced our income number a little by having DH not pull in any overtime for a few months. That shaved a lot off the 6 month average. Yes, it hurt, but we had his employer "pay" him in other ways like a half day off here and there, maybe leaving a little early on a Friday, work from home once in a while, etc. In the long run, it helped a lot.

[lifelesson]

I agree check into another attorney as others have stated on this site. some attorney's predfer 13's and some don't do 7's. Find one who does do 7's and will use your real numbers. And I think you might have missed something in your J too. Look over your banking the last year there must be a thing you left off.

[MrSmithster]

i cant imagine anyone advising you to have a child(let alone your lawyer) when in debt $70K+. i hate to be judgmental, but come on now. maybe know one else wants to say it, but being $70K in debt and planning to have your first kid seems about as irresponsible as anything i have read in this forum. sorry, but i think your priorities are somewhat misplaced.

[aces67]

You could file a 13 and then if you do get pregnant convert it at that time to a Ch 7. I would definitely talk to a couple more lawyers though just to be sure.

[RBisDebtFree]

Definitely talk to more lawyers, maybe try to find one that is also a Panel Trustee, that helps them know what works and what doesn't from the inside...

I was $31k above the median income and quite a few lawyers said you can't file and you have to quite your job or at least work half-time to get under the means test. Once I found my attorney, he worked everything out and filed with a few weeks. I don't know if I'm in any danger still, probably, but so far, I am 7 days away from my auto-discharge.

I think you can do it, there should be more room. Usually, you are filing because you can't make it work. In reality, I think the work case is doing 13 and then converting to 7 when your means would work out or cutting down your income is also a very good advice that -- both of those advices you were given are really good!

As it was mentioned, if you do 13, make sure you have as many as deductions as possible, you do want to make sure you have a room for saving up!

[grassisgreen]

New attorney... There are many people that have their opinions on hiring a trustee, but it worked for me. I also failed the means test, but because I was able to count debt as business debt, it didn't matter. At my 341 I was asked for a couple things that my attorney already had and was out in 15 minutes, I noticed depending on the attorney the trustee asked more/less. The one I hired had 30 yrs experience and was one of the 7 trustees in our area, either way you need to keep shopping for an attorney.

[momtoroxy]

I would shop attorneys also. The first one we met with told us there was no way we could do a chapter 7. We are now it a 7; our 341 is in two weeks.